jordan’s foreign trade policy

Jordan’s Experience…. Foreign Trade

Mr. Ahmad Hammad Deputy Director,

Foreign Trade Policy Directorate

Jordan’s Foreign Trade Policy

A foreign trade policy based on the norms of economic openness and integration into the world economy.

It incorporates the country’s vision in viewing economic partnerships as necessarily achieving both mutual interests and fair dividends.

World Wide Market Access Opportunities…

MultilateralWorld Trade Organization (WTO) 2000 World Trade Organization (WTO) 2000

RegionalGreater Arab Free Trade Area (GAFTA) 1997 Greater Arab Free Trade Area (GAFTA) 1997

Agadir Agreement 2004Agadir Agreement 2004Organization of Islamic States (OIC) 1993Organization of Islamic States (OIC) 1993

BilateralUnites States of America FTA 2000Unites States of America FTA 2000European Union Association Agreement 1997European Union Association Agreement 1997EFTA States FTA 2001 EFTA States FTA 2001

Singapore FTA 2004Singapore FTA 2004Canada FTA Canada FTA

20092009Turkey FTA 2009Turkey FTA 2009

Jordan and the WTO

Jordan’s Accession to the WTO in brief….

6

Jordan’s WTO Commitments…

Schedule of Concessions in GoodsIn general, concessions were made over a ten year

transitional period for a number of items under tariff rates 30% and 35%. A 20% tariff rate will be reached by the year 2010 according to the following reductions (with some exceptions):

30% - March 200030% - March 2000

25% - March 200525% - March 2005

20% - March 201020% - March 2010

Exceptions:-Cigarettes & Tobacco-Tomatoes-Cucumbers-Olive Oil

7


Schedule of Concessions in Goods- Information Technology Agreement (ITA): bound at 0%

- Medical Equipment Sectoral Initiative: bound at 0%

- Agricultural Equipment Sectoral Initiative: bound at 0%

- Chemical Harmonization Sectoral Initiative: bound at

0%, 5.5%, 6.5%

8


Schedule of Specific Commitments in Services

Specific Commitments Commitments covered (106) services sectors and

sub-sectors out of 155 sectors of the UN CPC

Commitments covered four modes of supply for services as identified in GATS

Full foreign equity participation in investments allowed in various sectors such as: financial, telecommunications, computer and related services, research and development, hotels and catering services, management consultancy, market research, packaging services, production and projection of movies, …etc.

9


Schedule of Specific Commitments in Services

Transitional periods

- Telecommunications sector - Insurance services sector - Courier services - Education services - Health and Social services

Regional and Bilateral FTAs

Jordan – US FTA

The FTA was signed on 24/10/2000 and entered into force on 17/12/2001, and by 1/1/2010 it entered its full implementation.

Jordan is the fourth country to sign an FTA with the United States.

Comprehensive agreement covering trade in goods and services, protection of intellectual property rights, environment, labor and electronic commerce

Jordan – US FTA

Simple rules of origin: the cost or value of materials produced in Jordan and/or the direct cost of processing performed in Jordan account to at least 35% of the US customs appraised value of the good.

Possibilities of accumulation of origin among countries that have concluded FTA’s with the US (Arab countries and Singapore)

Since the entry into force of the agreement, Jordanian exports to the United States had more than tripled, reaching 1037 and 863 million USD in 2008 and 2009 respectively.

Jordan - EU Association Agreement

Jordan and the EU signed the Association Agreement on November 24th, 1997 with the aim of creating a free trade area as well as establishing a comprehensive framework for political, economic, trade and investment, social, cultural and financial cooperation.

The agreement was concluded within the framework of the Barcelona Process 1995, the goal of which is to create a larger area of peace and economic prosperity in the Mediterranean Area.


The agreement entered into force on May 1st, 2002.

From date of entry into force, Jordanian exports into EU-member countries will be exempted from customs duties and other charges having equivalent effect. While EU exports are allowed entry into Jordan free of customs duties and charges having equivalent effect over a transitional period of 12 years.


The Agreement contains comprehensive provisions on the conduct of trade in agricultural and industrial products, right of establishment and services, payments and movement of capital, competition, intellectual property rights, financial co-operation, economic co-operation in the field of industry, standards, transportation, telecommunications, energy, science and technology, environment and tourism, statistics, and the fight against illegal drugs.


Jordan has faced difficulties in seizing the opportunities granted by the Association Agreement as Jordanian exports to the EU are still way below expectations, mainly due to obstacles concerning the rules of origin and standards.

The Pan euro-med rules of origin is currently under revision by the regional convention on rules of origin, aiming at simplifying these rules in a way that meets the characteristics and capabilities of the industrial sector in the southern Mediterranean countries, including Jordan.


As for standards, the government has worked intensively with the European partners, to promote and harmonize the current Jordanian standards to meet those applied in the EU, which will also enhance the competitiveness for the Jordanian products in other international markets.

GAFTA Greater Arab Free Trade Area was declared

within the Social and Economic Council of the Arab League to activate the Trade Facilitation and Development Agreement that has been in force since January 1st, 1998, including in its membership 17 Arab countries.

It is one of the most important economic achievements towards establishing the Arab Common Market. As of January 1st, 2005, the agreement reached full trade liberalization of goods (full exemption of customs duties) between all Arab countries members of the GAFTA, except Sudan and Yemen being less developed countries.

GAFTA

The Agreement’s rules of origin apply a flat rate of 40% as local added value.

12 Arab countries do not require authentication of certificates of origin and accompanying documents by embassies and consulates.

About 42% of Jordan’s foreign trade is directed within the GAFTA area. (50% exports and 35% imports – Nov 2010).

Jordan - EFTA FTA

It was signed on June 21, 2001, with the EFTA states (Iceland, Liechtenstein, Norway and Switzerland), and it entered into force on September 1st, 2002.

The Agreement complements both parties efforts to contribute to the creation and strengthening of an enlarged free trade area between European and Mediterranean countries, thus constituting an important contribution to Euro – Mediterranean integration.

Agadir Agreement The Agreement Establishing a Free Trade Area

Amongst Arab Euro-Mediterranean Countries (Agadir Agreement) was signed in Rabat on Feb. 25th , 2004 between by Jordan, Egypt, Tunisia and Morocco on May 8th. 2001.

The Agreement entered into force on July 6th 2006.

The Agreement aims as enhancing economic and industrial integration between the member countries as well promoting trade with the EU.

Jordan Singapore FTA

Jordan and Singapore signed an agreement to establish a free trade area between the two countries on May 16th 2004. The agreement, which entered into force on August 22, 2005, aims at promoting economic relations and developing partnerships between the two countries as well as promoting bilateral trade in goods and services between the two countries.

Jordan-Turkey Association Agreement

Jordan signed with Turkey on 1/12/2009 and entered into force on 1 March 2011.

The agreement covers both industrial and agricultural products.

The agreement allows accumulation of origin for the purpose of exporting to the EU.

Bilateral Trade between Jordan & Turkey

Year Jordan Exports to

Turkey

Jordan Imports

from Turkey

Trade balance

2009 39.2 412.9 -373.7

2010 60.8 558.4 -497.6

2011 98.1 548.9 -450.8

9/2012 109.2 557.4 -448.2

Jordan-Canada FTA The agreement was signed on 26 June 2009

and entered into force on October 1st 2012. The agreement covers industrial and

agricultural products. Jordanian products enter into Canadian market

duty free as of the date of entry into force while Canadian products are exempted on a transitional period of 5 years.

Trade with Canada

تطورالتجارةللخارجيةلالردن

-10

-5

0

5

10

15

2003 2004 2005 2006 2007 2008 2009 2010

نار

رديمليا

الصادراتالوطنية

المستوردات

الميزانالتجاري

التوزيعالجغرافيللصادراتالوطنية

-0.501.001.502.002.503.003.504.004.505.00

2006 2007 2008 2009 2010

نار

دييار

مل

الدولالعربية

آسيا

الشمالية امريكا

اخرى

االوروبي االتحاد

أهمالسلعالمصدرة )2010-2006(

0.00

200,000.00

400,000.00

600,000.00

800,000.00

1,000,000.00

1,200,000.00

1,400,000.00

2006 2007 2008 2009 2010

السنة

)

ناردي

1000

(

اتدر

صاعال

مومج الكيميائية المواد

) الخام )الفوسفاتوالبوتاس المواد

المالبس

الغذائيةوالحيواناتالحية المواد

Trade with FTA Partners (USD Million)

Agreement Exports ImportsGAFTA 3190 6838EU Association Agreement

315 3773

US FTA 1035 1078EFTA 20 173Agadir Agreement

148 784

Singapore FTA

6.5 25

Turkey FTA 89 549Canada 13 85

Jordan’s Foreign Trade

Imports (2009)

Jordan’s Foreign Trade

Exports (2009)

Thank You!

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jordan’s foreign trade policy

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